Outsourcing
Sainsbury's includes data analytics in new Nectar card deal
LMG service will analyse till and loyalty card data
By Tash Shifrin | Published 15:39, 10 April 07
Supermarket giant Sainsbury's has extended its deal with Nectar loyalty card firm LMG to include customer data analytics services.
Sainsbury’s – currently at the centre of a bidding war between would-be purchasers – has been part of LMG’s Nectar card programme since its launch. But the contract renewal is aimed at gaining more insight into customer behaviour as well as providing a reward scheme for regular shoppers.
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The deal makes Sainsbury's the first major retailer to use LMG's new data analytics service, which will analyse data from supermarket tills and Nectar information.
Sainsbury's chief executive Justin King said: "We have reviewed our participation in Nectar as part of our “Making Sainsbury's Great Again” recovery plan and the renewal of the contract confirms we're confident that customers value the rewards they can collect.
“We are also broadening our relationship to enhance our ability to use the data the programme can provide for the benefit of our customers."
Last year Sainsbury’s took a £65m hit as a result of terminating a £1.7bn outsourcing contract with Accenture and bringing 470 IT staff back in-house. The contract was terminated with five years left to run.
The in sourcing move was made after a review found that the company would be able to improve logistics and other IT operations if it regained direct control of systems and staff.
The firm was under pressure to claw back market share lost to giant rival Tesco, but has now seen store revenues grow steadily over the past two years. But the company’s future is uncertain amid buy-out moves by equity firms.
Investment groups Blackstone and Texas Pacific are understood to have dropped out of the bidding race after the founding Sainsbury family opposed an offer of less than 600 pence a share, leaving CVC Capital Partners the only bidder. CVC has until Friday 13 April to confirm a bid.
